Sunday, September 27, 2009

In an effort to reduce underwriting costs and improve efficiency, a coalition of American health insurers announced today that they will now consider being female a preexisting condition that would essentially eliminate all health insurance for women.

AHIP, a national association representing nearly 1,300 member companies providing health insurance coverage to more than 200 million Americans announced Friday that virtually all industry members had come together in a bipartisan manner to introduce and implement this broad cost control measure. “We are faced with a variety of differing state law requirements that force us to make this decision to achieve underwriting consistency,” said Karen Ignagni, President and CEO for AHIP. Recognizing that insurers across the country have been trying to avoid such a measure for years, charging women much more for care than men, Ignagni explained that this just wasn’t enough in a competitive environment that had to meet the demands of Wall Street. Recent measures to stop gender discrimination in insurance coverage have also required the group to "get ahead of these measures."

"In the past, our members have had to comply with a patchwork of regulatory requirements. In many states, we can refuse coverage because of previous cesarean section births, even though our own cost containment policies are what forced those women to have cesareans in the first place. Parts of the country allow us to rescind coverage if a woman fails to disclose that she is a victim of domestic violence, and we’ve taken some criticism for that. Rescission of coverage has worked in the past, but this becomes difficult to justify when we have to hire armies of investigators to comb through and find that single unreported pap smear that would allow us to cancel coverage. Do you know how many pap smears women get? In some states – but not all – we can refuse to cover birth control and still refuse maternity care. We know that this can appear to be an inconsistent approach, so we as a group have determined that it is in the best interests of our shareholders to simply stop covering all women."

Ignagni emphasized that health insurance plans offered by their members have developed a new generation of strategies that are improving the quality of health care, including strategies to promote prevention and wellness to keep people healthy and reduce health care costs for everyone and taking unnecessary costs out of the system for patients, employers and taxpayers. To that end, Ignagni said, "This is just the next logical step. We had to find better ways to reduce costs, and this was found to be the best way to accomplish that goal in the face of the demands of our members' stockholders, to whom they owe a sacred duty.

Spot had a little innocent fun the other day with Pat Anderson’s manifesto that school vouchers for private and parochial schools were too constitutional in Spot’s post Pat Anderson’s magical thinking. Craig Westover, one of Anderson’s vassals at the Minnesota Free Market Institute, and who undoubtedly provided the intellectual spark to set her little trash fire ablaze, tacked up a long comment to the post, claiming among other things that it (the comment) was snarky. Spot is glad that you told us, Captain.

Anyway, Spot responded to the comment, but he wanted to focus especially on something that the Captain wrote. He wrote “Blaine Amendments!” like it was a magic incantation that would make provisions of the Minnesota Constitution and settled case law in Minnesota disappear. Poof!

The Blaine Amendments are one of the beads on the public-funds-for-private-school roasry, and Sticks has written about the subject several times. James Blaine, a one-time Speaker of the U.S. House promoted an amendment to the U.S. Constitution to prohibit the states from spending public money on sectarian schools. Blaine was what was then known as anti-Papist, but the proposed amendment but did not refer to Catholics only, but to all religious sects.

The amendment was not passed by the Congress, and therefore not sent on for ratification by the states, but several states, including Minnesota, did put a similar provision in their state constitutions. The term in Minnesota’s constitution is Art. XIII, Sec. 2, which Spot has quoted many times, but will again for good order’s sake:

Article XIII, Section 2. Prohibition as to aiding sectarian school In no case shall any public money or property be appropriated or used for the support of schools wherein the distinctive doctrines, creeds or tenets of any particular Christian or other religious sect are promulgated or taught.

As Spot has also said several times, this provision sets a higher standard than the “religiously neutral” standard that the current crop of conservative judicial wizards have set for the First Amendment to the U.S. Constitution.

Captain Fishsticks apparently believes that by intoning “Blaine Amendments” he can make this section of the Minnesota Constitution go away because James Blaine was not a nice man. He believes that can also make the case of MCLU v. State go away by the same process. Because so few of you follow Spot’s links, boys and girls, here again is what Spot wrote about MCLU v. State:

Oh, by the way, boys and girls, did you know that Minnesota used to have a voucher-like scheme for private, including sectarian, schools? Well, it did until the Legislature got spanked by the Minnesota Supreme Court in MCLU v. State (oh, vile MCLU!) in 1974. It was called a tax credit system, where private school tuition up to a certain amount could be credited against Minnesota income tax, and if the credit was bigger than the tax owed, the state would send you the difference. Vouchers without the actual coupon.

The Court said, in a unanimous opinion, what? Are you nuts? (That’s Spot’s paraphrase, anyway.) It’s a violation of the separation of church and state. The Court ruled on US constitutional grounds, but noted that Minnesota also had this constitutional provision:

[Art. XIII, Sec. 2, quoted above]

Spot has written many times that vouchers will remain merely a gleam in Captain Fishsticks’ eyes.

Update: cite for MCLU v. State: 302 Minn. 216,224 N.W.2d 344 (1974)

Now, this is all rather repetitive, but Sticks started it. And boys and girls, Spot did save the good part for the end. Art. XIII, Sec. 2 has not fallen into a state of desuetude as Captain Fishsticks would have you believe. It’s alive and well, and it’s still being used for the purpose for which it was written.

Most of you are familiar with the the lawsuit that the ACLU brought against Tarek ibn Ziyad Academy (TIZA) and the Minnesota Department of Education, alleging that the school, a charter school receiving public funds, is really a religious school.

TIZA is the school that Katherine Kersten has been in such a snit about; she wrote rapturously about the ACLU’s suit. But you should go read the complaint filed in the lawsuit. To give you a head start, here’s the opening:

This is an action to obtain declaratory and injunctive relief establishing: that the operation and public funding of the Tarek ibn Ziyad Academy (“TIZA”) is unconstitutional as a violation of the Establishment Clause of the First Amendment to the U.S. Constitution; and of Article 1, Sec. 16 and of Article 13, Sec. 2 of the Minnesota Constitution . . . .

Article 1, Sec. 16 is Minnesota’s “First Amendment.” And Article 13, Sec. 2 ought to begin to have a familiar ring to it to you by now, boys and girls. Spot wishes that some of the Christian, er, tinged charter schools would get the same scrutiny, but you certainly can’t say that Art. 13, Sec. 2 is just an anachronism.

Captain Fishsticks is kind of an anachronism, isn’t he Spotty?

Well, grasshopper, you’ll have to decide that for yourself! But, he’s probably not the best legal adviser for Pat Anderson on the subject of constitutional law.

Saturday, September 26, 2009

This is a curious spot for, well, Spot. But Seifert’s right about something pretty important as a matter of Minnesota constitutional law. The former House Minority Leader thinks that a system of publically-funded vouchers to to pay private and sectarian school tuition in the state is unconstitutional. He’s right.

Seifert is running for the GOP nomination in the governor’s race in 2010. Seeing an opportunity on this issue, some of Seifert’s ankle-biting competition have tried to create a wedge issue, claiming that vouchers are constitutional. Prominent among the ankle biters is Pat Anderson. She says, in effect, many of us want this so much it just has to be possible! Trademarked Republican magical thinking. No analysis beyond that.

Spot has not seen any MSM reporting on this, but it does appear in Polinaut on the MPR site, and on Mary’s Page at TPT. Neither account gives the reader the smallest idea who might be right, and the always vacuous Mary Lahammer even titles her post “First Fight in Guv’s Race!” Okay Spot added the exclamation point, but it seemed a natural for Lahammer’s writing.

There is one commenter to the Polinaut post (not Spot) who says, um, there is some law on this subject, just in case it comes as a surprise to the writer at Polinaut.

Even though they are blog entries, they are written by MSM journalists. The MSM is fundamentally incapable of doing anything more than merely reporting “he said – she said.” At least the genders are right this time. But you would think that political reporters, even the dimmest bulbs among them, would have some faint recollection that the issue of school vouchers has a long political and legal history in Minnesota.

The Legislature’s appetite for school vouchers is waning, as Rep. Buesgens and his buddy Captain Fishsticks found out this spring.

Oh, by the way, boys and girls, did you know that Minnesota used to have a voucher-like scheme for private, including sectarian, schools? Well, it did until the Legislature got spanked by the Minnesota Supreme Court in MCLU v. State (oh, vile MCLU!) in 1974. It was called a tax credit system, where private school tuition up to a certain amount could be credited against Minnesota income tax, and if the credit was bigger than the tax owed, the state would send you the difference. Vouchers without the actual coupon.

The Court said, in a unanimous opinion, what? Are you nuts? (That’s Spot’s paraphrase, anyway.) It’s a violation of the separation of church and state. The Court ruled on US constitutional grounds, but noted that Minnesota also had this constitutional provision:

Article XIII, Section 2. Prohibition as to aiding sectarian school In no case shall any public money or property be appropriated or used for the support of schools wherein the distinctive doctrines, creeds or tenets of any particular Christian or other religious sect are promulgated or taught.

Spot has written many times that vouchers will remain merely a gleam in Captain Fishsticks’ eyes. [And apparently Pat Anderson’s, too!]

Update: cite for MCLU v. State: 302 Minn. 216,224 N.W.2d 344 (1974)

How does dutifully (and merely) regurgitating dueling press releases by Seifert and Anderson help Republicans choose the non-wacky candidate? And may Spot say, that’s a difficult task in the present environment.

So let's take a look at the charges recently flying back and forth from Republican endorsed Mayoral Candidate Eva Ng and the Chris Coleman campaign. Accusations have been pouring out of the Ng campaign and the Republican Party of Minnesota about Coleman's out-of-city experiences. Of course, having those charges highlighted the day Candidate Ng is holding a fundraiser in Inver Grove Heights might be considered poor timing in some circles.

But more to the point, let's take a look at what matters in these campaigns: Money. Donations. Funding the campaign war chest. More specifically, what part of it came from where.

I had a little down time this morning to take a look at the the Eva Ng campaign report (available here) to see if the candidate puts her money where her mouth is. In doing so, there does seem to be a little sleight-of-hand going on as to where her contributors actually reside. Particularly questionable is whether Stanley Hubbard actually lives at that address in Saint Paul, whether the White Bear Lake address of a Mr. Kohls qualifies as Saint Paul, and whether SCSU Scholar, all-around government hater and public payroll employee Janet Beihoffer actually resides in our fair city. Most precious, though is the listing of Sate Senator Mike Jungbauer (R-East Bethel) as a Saint Paul resident. Now I know some RPM wonk is going argue that City Code Chapter 7, Section 7.08 calls for "election conduct and procedure" to take place in accordance with state law, and Minnesota Rules Section 4501.0100 allows a person to list a business address, but I'd argue that "election procedures" aren't reporting procedures. But honestly, if you're a RPM flunky and have that level of expertise, don't you have better things to do?

But the purpose of this post is money, and I'm going to count the contributions of Mr. Hubbard, Mr. Kohls, Professor Beihoffer, and Senator Jungbauer as coming from outside the city because I'm not one to ignore the facts on such matters. From the pre-primary report, we learn that only 25% of Candidate Ng's contributions (beyond her own lending and contributions) came from within the City of Saint Paul. About 17% came from people living outside of the city, 5% came from political party units, and a whopping 53% came from the candidate herself. Interesting fact: the average amount of the out-of-city donation was just about twice the average amount of an in-city donation.

So next time Eva Ng or one of her attack dogs scream about Chris Coleman's friends outside of the City, take it with a grain of salt.

Please note that the report I was working from did NOT include the haul from that Inver Grove Heights fundraiser.

(Thanks to SJS for starting me along in this project)

Update: I guess the RPM has forgotten about all those Norm Coleman billboards located in Duluth and Brainerd back in 1997 when Norm was running for reelection as Saint Paul's mayor a few short months before he began his bid for governor. Seems to me the mayoral campaign paid for those.

You just can’t take the nut out of wingnut. Reports come to Spot that Pat Anderson, in an apparent attempt to get some traction against the prohibitive [chortle] front runner for the GOP nod for governor, Lonely Boy Marty Seifert, says, “Why yes, we can have school vouchers in Minnesota. We can! We can!” She goes on to say that David Hann, another GOP aspirant to Tpaw’s porcelain throne, has been working so hard on vouchers that they just have to be possible.

We’re in “Obama was born in Kenya” or “the Democrats want to kill Grandma” territory here. This is well settled. In response to some hallucinations about school vouchers that Craig Westover, affectionately know as “Captain Fishsticks,” had some time ago, Spot wrote about it. Interestingly, both Pat and Sticks swim these days in the same brackish water tank, the Minnesota Free Market Institute. Anyway, here’s what Spot wrote:

The Legislature’s appetite for school vouchers is waning, as Rep. Buesgens and his buddy Captain Fishsticks found out this spring.

Oh, by the way, boys and girls, did you know that Minnesota used to have a voucher-like scheme for private, including sectarian, schools? Well, it did until the Legislature got spanked by the Minnesota Supreme Court in MCLU v. State (oh, vile MCLU!) in 1974. It was called a tax credit system, where private school tuition up to a certain amount could be credited against Minnesota income tax, and if the credit was bigger than the tax owed, the state would send you the difference. Vouchers without the actual coupon.

The Court said, in a unanimous opinion, what? Are you nuts? (That’s Spot’s paraphrase, anyway.) It’s a violation of the separation of church and state. The Court ruled on US constitutional grounds, but noted that Minnesota also had this constitutional provision:

Article XIII, Section 2. Prohibition as to aiding sectarian school In no case shall any public money or property be appropriated or used for the support of schools wherein the distinctive doctrines, creeds or tenets of any particular Christian or other religious sect are promulgated or taught.

Spot has written many times that vouchers will remain merely a gleam in Captain Fishsticks’ eyes. [And apparently Pat Anderson’s, too!]

Update: cite for MCLU v. State: 302 Minn. 216,224 N.W.2d 344 (1974)

Spot says to his Republican readers: beware anybody who peddles the snake oil of school vouchers in Minnesota. They’re charlatans. School vouchers are not even remotely possible politically in Minnesota, and they’re unconstitutional on top of it.

Find yourself a nice Birther, or Deather, or even, Tenther; they’re much more realistic.

Thursday, September 24, 2009

John Cole and the boys and girls at Balloon Juice are assembling a dictionary. It has entries like this:

101st Chairborne- Hawkish bloggers who call for belligerent military solutions to nearly every foreign policy question without taking any personal risk. 21st century synonym for ‘chickenhawk.’ Also known as the Keyboard Kommandos, the Basement Brigades, or the Fighting Hellmice.

While Barack Obama spends time advocating his ideas for health care reform – part of the job he’s got, and Bob Huge complains about it, Tim “Tenther” Pawlenty gallivants around the country looking for a new job while neglecting the one he’s got. Not a peep from the bilious Bob here, by the way.

Former Minnesota governors generally refrain from head-on clashes with their old office's current occupant. That may be why former Gov. Arne Carlson did not mention his fellow Republican successor, Gov. Tim Pawlenty, by name Tuesday, or explicitly blast the latter's absences from Minnesota as he explores a possible presidential bid.

But Carlson made clear to an audience assembled by the progressive think tank Growth & Justice that he thinks Minnesota's problems need more gubernatorial attention than they've been receiving.

The Tenther fiddles while Minnesota burns. Maybe Bob should write a letter.

Tuesday, September 22, 2009

Matt will be at DL for a few remarks and a meet and greet Thursday night, the 24th of September. We expect him around seven o’clock. Mr. Entenza is a former member of the Minnesota House of Representatives, where he served as Minority Leader for a time; he announced his candidacy for governor some time ago.

What should the Constitution look like in the year 2020 and how should it be interpreted?

For a while now, excerpts of some of the presentations intended for the conference have been published at Balkinization, the blog started by Jack Balkin, a constitutional law professor at Yale. Some of these recent posts are very interesting and quite accessible. Here are a couple of bits from a post by Jamal Greene (a law professor at Columbia Law School) this weekend that Spot especially liked:

Numerous planks of the Reaganite conservative legal agenda may be stated in arguably originalist terms: for example, opposition to abortion rights, restrictions on school prayer, gun control, private litigation against government officials, and procedural rights for criminal defendants. But if the goal was to use originalism to achieve this or some other set of originalist-grounded doctrinal objectives, it has not nearly been realized. There is District of Columbia v. Heller, of course, and state sovereign immunity has been beefed up considerably, but one is hard-pressed to identify any other significant doctrinal developments over the last 25 years that are both originalist (other than coincidentally) and consistent with traditionally conservative political commitments.

The limited jurisprudential utility of a resolute commitment to originalism makes perfect sense. No serious legal professional can be originalist in the way in which its promoters in the public sphere usually mean it: that constitutional interpretation will be dictated by the expectations of the ratifying generation. Most American women like their equality just fine, thank you. And so originalists, to be taken seriously, must water the doctrine down so as not too much to unsettle the vast architecture of settled law that is inconsistent with original understandings. In light of broad, unanticipated, and well-calcified expansions in the administrative state, in congressional and executive power, and in individual rights, there is surprisingly little of relevance for “faint-hearted” originalists to pick at. Moreover, and inevitably, many of today’s conservatives, including on the Court itself, like their executive power just fine, thank you. They have little taste for doctrinaire originalism. For these reasons, I have come to the view that the window for originalism-motivated constitutional change is closed for the foreseeable future, with relatively little to show for itself by way of doctrine.

But here is where “originalism” has been more important:

As I said, however, affecting constitutional doctrine was not the foremost goal of the originalism movement. Rather, originalism’s brilliance lies in its capacity to validate conservative politics. Originalism is at once cousin and heir to meaningless terms like strict constructionism and judicial restraint, the crucial difference being that, within professional discourse, originalism is not meaningless at all. Rather, a serious debate can be had, and has been had, about what originalism entails, when it should and should not be used, and what its limitations might be. And thus the fight was joined. The originalism movement had champions both within the world of self-respecting legal professionals—most prominently, Judge Bork and Justice Scalia—as well as outside of it—including demagogues like Rush Limbaugh and Glenn Beck. Within non-professional discourse, the originalism movement has helped give a populist frame to elitist conservative politics. It has done so both by highlighting the countermajoritarian difficulty and by creating synergies between the rhetoric of legal advocacy and a particularly resonant American cultural narrative of restoration. If you’ve been persuaded that you “want your country back,” then those espousing originalism within judicial politics are selling what you’re buying. By helping to marry conservative politics to the professed meaning of the Constitution, originalism has been a powerful weapon in the right’s arsenal. Additional effects on doctrine then come not by way of originalist opinions but indirectly through what Jack Balkin and Sandy Levinson have called partisan entrenchment: successful conservative politicians have availed themselves of their right to stock the bench with like-minded judges.

Well, he said that the real success of “originalism” was not in the courtroom, but rather in creating a conservative frame for Rush Limbaugh and Glenn Beck to use to dress up their demagoguery. And since we know that conservatives like to reject modern thinking in favor of ancient tracts, it works.

But TentherPaw knows that the argument is a convenient short-hand, a code, for the other hot buttons that Professor Jamal refers to: opposition to abortion rights, restrictions on school prayer, gun control, private litigation against government officials, and procedural rights for criminal defendants. And don’t forget civil rights, and especially gay rights.

The seemingly avuncular TentherPaw is wearing his gang colors for the southern Republican base and giving their gang signs at every turn.

Sunday, September 20, 2009

Spot saw this quote on TBogg and decided it should be posted here, too:

Which brings me to this charming vignette, courtesy of blog commenter Harry Hopkins:

"I remember back in the late 1990s, when Ira Katznelson, an eminent political scientist at Columbia, came to deliver a guest lecture. Prof. Katznelson described a lunch he had with Irving Kristol during the first Bush administration.

"The talk turned to William Kristol, then Dan Quayle's chief of staff, and how he got his start in politics. Irving recalled how he talked to his friend Harvey Mansfield at Harvard, who secured William a place there as both an undergrad and graduate student; how he talked to Pat Moynihan, then Nixon's domestic policy adviser, and got William an internship at the White House; how he talked to friends at the RNC [Republican National Committee] and secured a job for William after he got his Harvard Ph.D.; and how he arranged with still more friends for William to teach at Penn and the Kennedy School of Government.

I applaud President Obama for his blunt condemnation of rapper Kanye West after West rudely embarrassed country star Taylor Swift on stage at the MTV Video Music Awards.

For years, rappers have flourished through vile, aggressive behavior and music, all the while being worshipped by boys and young men of all races, but more prevalently by those of color.

I hope the comment of Obama, a black man who has reached the pinnacle of success, will remind young black men that hard work and education, not controversy and flamboyance, are the true measure of one's value to society.

In 1959, by any measure, Pat Boone was on top of the world with a very successful TV show, a best-selling book ("Twixt Twelve and Twenty"), a top 10 hit by the same name and a box office smash movie ("Journey to the Center of the Earth").

Still, Boone went to Elvis Presley's manager, Col. Tom Parker, to ask how he could stay on top.

Parker told him, very succinctly, "You've got a problem, son, and it's called overkill. You're everywhere, while my boy's over in Germany in the army. At the rate you're going, by the time he comes back, you'll be old hat."

Boone had his best year in 1959 and his worst in 1960 (when Elvis came home from Germany).

Barack Obama might take note of Parker's advice. Like Pat Boone, he's everywhere. People are beginning to wonder: Shouldn't somebody tell him it's time to stop campaigning and start working? The sleeves are rolled up, the coat and tie are off, and as he said last Saturday at the Target Center, he's "fired up and ready to go!"

That's great, Mr. President, but you're only going to make another speech at another campaign stop, that's not the same as working.

BOB HUGE, EDINA

But Bob, Elvis is still dead. The real moral of Bob’s little story is make hay when the sun shines, because conditions may change.

It is hugely curious to Spot that Bob complains that our first black president is not working hard. Unlike two recent presidents that Bob undoubtedly adores. Both Reagan and Bush were widely regarded as disengaged presidents, and both spent large amounts of time away from the White House. Bush was sunning himself on his ranchette on August 6th of 1991 2001 when the famous PDB was delivered to him in Crawford.

Why do you suppose that the Obama family vacationed on Martha’s Vineyard at the home of a supporter (for a whole week), as did Bill Clinton, by the way? Because even though talented and educated, Obama worked on the South Side of Chicago in public service and as a law professor. Not as lucrative as Hollywood – or just being born rich – Obama doesn’t have a dilettante's ranch.

Bob’s assertion could easily be put to rest by comparing the number of days that Barack Obama has spent in the White House so far versus the same figure for Bob’s cowboy heroes over a comparable period of time. Bet it ain’t close.

Boys and girls, do you think that Bob is really concerned that Barak Obama is not working hard enough and being effective enough? Piffle. The notion is risible.

The two letters quoted both play on the stereotype of the lazy black man. Huge’s pitch is a little more sophisticated than Gabbert’s, but the notion is exactly the same.

A Smart Politics analysis of the recently released 2008 Uniform Crime Reports finds that red states across the nation have both higher violent and property crime rates than blue states, across several measures of partisanship.

Yah, Siggy saw zat.

Well, the author of the post raises this question:

So here is the chicken and egg question: are states with high crime rates electing Republicans because the GOP is perceived to be tougher on crime and thus are more likely to take action to fix the state's crime problems, or are Republican policies to combat crime proving less effective than Democratic policies and thus resulting in higher crime rates?

So, which is it, Siggy?

Bah. They’re both chickens.

I don’t follow you, Siggy.

Both ze higher crime rates and ze voting for Republicans are ze consequences of ze real egg: ze people in zese areas.

You mean that more criminals are Republicans?

Nah, nah, grasshopper! You are zo thick, zometimes! It is wery difficult, maybe impossible, to zay how zese tings are related, but one is almost certainly not ze cause of ze other.

If [psychologist Erich] Fromm were alive, he would point to Dobson as the modern realization of the “magic helper” who “promises excitement and offers a political structure and symbols which allegedly give meaning and order to an individual’s life.” Fromm would also recognize in Dobson the sadomasochistic tendencies that he says are essential to the authoritarian character–the simultaneous drive to hurt the weak and worship the strong.

It vuz a pretty neat trick, actually, zis Southern Strategy, but now it threatens to swallow ze whole Republican party.

But what about the extra crime?

Vell, ven you’re Ted Haggard, Mark Sanford, or John Ensign, you explain your transgressions by saying zat you just stepped away from God for a bit and you’re powerless to avoid evil on your own. Ze devil made me do it, so to speak. Za zame explanation vorks for a lot of people.

Wednesday, September 16, 2009

The newly reappointed Ben Bernanke – the Dr. Pangloss of the Federal Reserve - says that the recession is probably over. It’s a good thing he said so, because most of the rest of us are having trouble seeing it. Here’s one thing you can see, though: a huge fleet of idled container ships off of Singapore:

The U.K’s Mail Online (the source of the photo) says this about the fleet:

The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination - and is why your Christmas stocking may be on the light side this year.

The article continues:

The tropical waters that lap the jungle shores of southern Malaysia could not be described as a paradisical shimmering turquoise. They are more of a dark, soupy green. They also carry a suspicious smell. Not that this is of any concern to the lone Indian face that has just peeped anxiously down at me from the rusting deck of a towering container ship; he is more disturbed by the fact that I may be a pirate, which, right now, on top of everything else, is the last thing he needs.

His appearance, in a peaked cap and uniform, seems rather odd; an officer without a crew. But there is something slightly odder about the vast distance between my jolly boat and his lofty position, which I can't immediately put my finger on.

Then I have it - his 750 ft - long merchant vessel is standing absurdly high in the water. The low waves don't even bother the lowest mark on its Plimsoll line. It's the same with all the ships parked here, and there are a lot of them. Close to 500. An armada of freighters with no cargo, no crew, and without a destination between them.

Spotty, the articles says it’s the biggest gathering of ships in maritime history. Wasn’t the Spanish Armada larger?

I don’t know, grasshopper; look it up.

Anyway, James Kunstler calls the current mood of even cautious optimism and the stock market rally of the last several month the recession of reality.

We got another dose of reality when the Minneapolis St. Paul Business Journal reported a study that showed that Minnesota will not see pre-recession employment levels until 2013.

[Former Bush speechwriter] Frum was being nice [in remarks denouncing the rally], actually, because he knows better than anyone what took place in Washington this weekend. It was a Klan rally minus the bedsheets and torches. These people don't even have enough shame to hide their faces anymore. If more Republicans like Frum don't come forward to denounce such activities from their right flank, that right flank is going to finish the job of taking over the GOP, and hard as it is to believe, this kind of obnoxious craziness is going to seem quaint by comparison to what will be coming next.

Tuesday, September 15, 2009

Universal default is a practice put in place by banks to correct for the information asymmetry in credit markets.

Parse that one, boys and girls, I dare you.

Universal default is but one of a bunch of piling on techniques developed by the financial “services” industry over the years. It is a term, usually in credit card agreements, that if you’re in default to one creditor, a creditor to whom you are not in default can raise your interest rate, even on any existing balance. Sometimes, even if you’re not in default to anybody, a card issuer may decide to increase your rate:

Is this a great country, or what?

When I, my friends, was called to the bar, I’d an appetite fresh and hearty. And the usury statute in Minnesota provided, as similar statutes did in most states, for three kinds of limits. First, there was a cap on the interest rate that could be charged. Second, no greater interest could be charged after “maturity” than before (in other words, default rates were prohibited). Finally, there was a prohibition on the compounding of interest, or “interest on interest.” The statute was Minn. Stat. sec. 334.01. As Yogi Berra said, “You could look it up.”

Since then, loan sharking has become a respectable business, thanks to federal law. Our “financial services” industry has also grown from about ten percent of the economy to maybe a quarter to a third of it. Default interest rates, large late fees, and the growth of the rent-to-own and payday lending industries are certainly part of that.

Defenders will say that this makes credit available to more people; detractors say it just gives the hyenas a broader range on which to feed. Both are true to some extent, although Spot tends toward the latter camp. That is especially so in cases like the one the woman in the video describes.

The late fees, default rates, and rates applied on “universal default” are entirely out of proportion to any increase in administrative cost or additional credit exposure incurred by the credit card industry for making credit available less creditworthy customers. In fact, although Spot doesn’t have a link at the moment, the credit card industry is not so much an interest-based industry as it is a fee-based industry, making more on fees than it does on interest.

Saying that the hyena effect is the result of “information asymmetry in credit markets” is laughable, or as George Will might say, risible. It’s plunder, plain and simple.

Several commentators such as Jack Balkin, the Almanac panel last Friday night, and even Spot have pointed out what a laugher Bridgefail’s legal argument was. Now he’s just trying the save face.

But by owning the “political argument,” he still wants to hang on to the cachet of the “states’ rights” argument, so near and dear to the Republican constituency in the South. As was pointed out earlier at the first link above, “states’ rights” is a dog whistle argument against federal civil rights law.

During a conference call Thursday night with reporters and conservative activists, Pawlenty said that "asserting the 10th Amendment" of the U.S. Constitution might allow Minnesota to sidestep federally imposed changes to the health care system.

Bridgefail is not serious, of course. But talking about the Tenth Amendment to the Constitution is a code for talking about states’ rights, which in turn is a way of talking about resentment about race and the animus towards federal civil rights legislation in a way that every southerner understands.

In fact, Spot recalls that Governor Bridgefail first made his current Tenth Amendment remarks this week while campaigning in Richmond, Virginia, the heart of the old Confederacy, on behalf of Bob McDonnell, a Republican candidate for governor there.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

But the federal government has plenary power to adopt a health insurance program; here’s the first clause to Article I, Section 8 of the Constitution:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States; [italics are Spot’s]

Perhaps more interesting is Perry's theory of why expanded health care programs would be unconstitutional. I can think of two possibilities. Presumably the federal power to create such a program comes from the General Welfare Clause (Article I, section 8, clause 1), which gives the federal government the power to raise taxes and spend money for the general welfare. It's hard to see how the proposed health care program violates the Constitution under existing doctrine. [Jack Balkin is, by the way, boys and girls, a constitutional law professor at Yale].

Perry might claim that no state can willingly consent to participate in federal programs of the type contemplated. But that argument would probably make many other state cooperative ventures unconstitutional, including Social Security and Medicare.

Second, Perry might argue that although the federal government can spend money on some social welfare programs, after a certain point, federal expenditures become so intrusive that they dominate the regulatory playing field, effectively preventing states from creating their own independent programs and therefore this violates the Tenth Amendment. This argument seems a bit of a stretch, but if we took it seriously, it would threaten the constitutionality of a lot of federal programs, including federal grants that Texas depends on and that Texas citizens desperately need. Perry has been more than happy to take federal money for any number of federal health care programs in the past. It is not clear whether he has had a change of heart about their constitutionality as well. [italics are Spot’s]

Well, Professor, probably not. Perry, and Bridgefail, are just blowing off steam for the benefit of their political base and it is only partly related to health care. It’s a holdover from the demagoguery known as the Southern Strategy.

Congratulations, Timmy, you’re on your way; Spot knew you had it in you.

Update:

For two centuries, the South has feared a takeover by blacks or the feds. In Obama, they have both.

Friday, September 11, 2009

Tim Pawlenty is apparently willing to go to court to prevent uninsured Minnesotans access to federal programs designed to provide health care coverage:

Asked by a caller about the option of asserting the Tenth Amendment as a tactic to reject a successful health care overhaul by President Barack Obama during a tele-town hall organized by the Republican Governors Association, Pawlenty said, “that’s a possibility.”

* * *

“Asserting the tenth amendment may be a viable option,” Pawlenty said, adding that there may be “more of those claims and maybe even lawsuits if need be.”

First, he spends a day traipsing around Virginia with a candidate who finds working women detrimental to society, now he's signing on with secession-minded Rick Perry of Texas and the rest of the Tenth-Amendment-says-what-I-want pack. What's next? Declaring the Income Tax unconstitutional? Demanding withdrawal from the United Nations? Mandatory NARLO memberships?

At the speed with which he's veering right into extremist territory, our Governor's on track to out-Bachmann Bachmann in about a week and a half.

Thursday, September 10, 2009

One score and 14 years ago, our president's denial of federal assistance to a strapped New York was captured in a famous headline: “Ford to City: Drop Dead.”

Now we are engaged in a great civil war over healthcare, and the greatest generation is standing on the battlements against federal assistance to the uninsured. They’re the old man in the neighborhood yelling "Get off my lawn!"

So much for the idea that Grandma will do anything for her grandchildren.

Another stereotype of the elderly is that they are confused, and these polling numbers may partly explain the senior citizen who stood up at a town hall and exclaimed, "Keep the government’s hands off my Medicare!"

I can accept the idea that they’re worried about change, but I’m chagrined by the attitude that I’m OK, but I don’t care if you’re OK.

Tuesday, September 08, 2009

In the 1930s, financial markets, for obvious reasons, didn’t get much respect. Keynes compared them to “those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those that he thinks likeliest to catch the fancy of the other competitors.”

And Keynes considered it a very bad idea to let such markets, in which speculators spent their time chasing one another’s tails, dictate important business decisions: “When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.”

By 1970 or so, however, the study of financial markets seemed to have been taken over by Voltaire’s Dr. Pangloss [link is Spot’s], who insisted that we live in the best of all possible worlds. Discussion of investor irrationality, of bubbles, of destructive speculation had virtually disappeared from academic discourse. The field was dominated by the “efficient-market hypothesis,” promulgated by Eugene Fama of the University of Chicago, which claims that financial markets price assets precisely at their intrinsic worth given all publicly available information. (The price of a company’s stock, for example, always accurately reflects the company’s value given the information available on the company’s earnings, its business prospects and so on.) And by the 1980s, finance economists, notably Michael Jensen of the Harvard Business School, were arguing that because financial markets always get prices right, the best thing corporate chieftains can do, not just for themselves but for the sake of the economy, is to maximize their stock prices. In other words, finance economists believed that we should put the capital development of the nation in the hands of what Keynes had called a “casino.” [italics are Spot’s]

And that’s what we did. We’ve lived a life of magical thinking, a life where Harry Potter and Hobbits found a natural home, where God keeps making oil, and Santa will leave enough of it under the tree for another year. And real estate prices continue to climb, because everyone is so rational.

But we can’t talk about it, see? Because that would be, like, socialist, and so interfering with the market. Relax, let the Invisible Hand take care of it.

Spot thinks we’re going to have to dust off some of the dirty words to unbridled capitalism – like planning and public interest – and give the economic Alfred E. Neumans – the Chicago school of economics, David Strom, Captain Fishsticks – a time out before we piss it all away.

There are some problems with the connection to the intertubes here at Chez Spot, so light posting until that is fixed. Spot didn't want to miss the chance, however, to give Katie a shout out for her hatchet job on Ted Kennedy. She refers to Mary Jo Kopechne, of course. But the best part for Katie is undoubtedly her chance to trot out her favorite canard:

No doubt, Kennedy's efforts regarding the poor were unique and significant. He was, after all, one of only two U.S. senators still sitting in 2009 who were present for the construction of the entire infrastructure of the modern welfare state.

First elected in 1962, Kennedy was a lifelong advocate of the vision that animated Lyndon Johnson's Great Society and War on Poverty. These initiatives ushered in decades of welfare policy predicated on the belief that every social problem is best addressed by a massive, costly government program. [just a bit of an exaggeration, don't you think, boys and girls?]

In fact, policies of this kind have been a disaster for the poor. Far from helping low-income people join the middle class, they created a permanent underclass, hobbled by crippling habits of dependence. By subsidizing self-destructive behavior and discouraging work and marriage, these policies contributed to soaring out-of-wedlock birth rates (5 percent in 1960, 39 percent today) and rampant crime and drug use, and helped to make fatherless families the norm in the inner city.

By 1996, President Bill Clinton was promising to "end welfare as we know it," and many Democrats joined him. The resulting reforms emphasized work for recipients of aid to dependent children, and made government assistance temporary. Kennedy fought this new paradigm ferociously, and denounced it as "legislative child abuse."

Clinton-era reform succeeded so well that, within a few years, welfare rolls had fallen by 60 percent. If Kennedy's "consistent, passionate voice" had prevailed, many of America's poor would be substantially worse off than they are today.

Welfare rolls fell, dear Katie, merely because people were cut off. The logic of equating that with improved quality of life for poor Americans is logic so flimsy that only Katie would use it. Here's a little different picture:

A report released in October 2008 by the Working Poor Families Project reveals that more than 28 percent of American families with one or both parents employed are living in poverty.

The report, "Still Working Hard, Still Falling Short," is based on data for the period from 2004 through 2006 gathered from the US Bureau of Labor Statistics, the US Census Bureau's American Community Survey and the Census Bureau's Current Population Survey.

The report finds that 9.6 million households can be described as low-income or "working poor"—defined as families that earn less than 200 percent of the official poverty level. There were 350,000 more such families in 2006 than in 2002. More than 21 million children now live in low-income working families—an increase of 800,000 in four years.

In 2006 there were more than 29 million jobs in the US that paid below the official poverty level—defined as $9.91 an hour for full-time labor—an increase of nearly 5 million poverty-wage jobs from 2002.

Family income inequality also increased rapidly between 2002 and 2006, the report says. In 2006, the top 20 percent of US households earned on average 9.2 times as much as the bottom quintile.

The report notes that working poor families "lack the earnings necessary to meet their basic needs—a struggle exacerbated by soaring prices for food, gas, health and education." About 60 percent of low-income working families are forced to spend more than one-third of their income on housing, and nearly 40 percent lack health insurance for one or both parents.

Things have gotten worse since 2008, don't you think, boys and girls? Here's the permanent underclass, right where we left them.

If Katherine Kersten would just write that she doesn't care about poor people, that would be one thing. But to be so transparently dishonest about it really compounds the felony.